Published on Tuesday, 27 November
2012 00:00Written by ALBERT CASTROMalaya Business News Online -
Philippine Business News | Online News PhilippinesGreen buildings go for a
premium.In San Juan City, office spaces
certified as part of greenedifice, are
rented at 15 per cent per square meter higher than ordinary rooms.

Property trader and analyst CB
Richard Ellis (CBRE) declined to reveal that actual asking rate for the
newly-unveiled BTTC Center building butcontrasted to the Greenhills’ neighboring central business district
(CBD), it would mean an upside to theOrtigas CBD’s average asking rate of P563 per square meter,

Joanie Mitchell, CBRE director, said
the 12-storey BTTC Center is PEZA-accredited office space building that has
been pre-certified under the Leadership in Energy and Environment Design green
building of the US Green Building Council and is one of the six
fully-constructed buildings in the Philippines so far.

“We have six that had been certified
and 48 morethat are set to go online,”
said Mitchell.

“This is the first office building
of its kind in the area, given that Greenhills is predominated by commercial
spaces. This is 15 percent higher but then again we have nothing to compare it
with,” added Mitchell.

The BTTC Building is the second
green building to be marketed by CBRE, after the 33-storey Zuellig Building in
Makati which is currently 50 percent occupied.

CBRE in a recent briefing said the
office space segment of the property market continue to benefit from the
improving economic condition with tenants moving to Prime and Grade A buildings
from lower quality offices with the CBD and its fringes.

Mitchell said that the coming online
of green buildings will make compliance by multinational companies with green
building much easier.

The appreciation for Green building
in the Philippines is slowly taking root as supply come online, which only a
year ago had observers saying it has yet to reach a point where developers can
demand for a premium from its locators.

Study

CBRE in a 2009 study noted that the
drive for adoption of green buildings is due to “convergence of public
sentiment, legislative pressure and technological advances” that supports its
sustainability.

“The desire to be ‘green,’ or to be
perceived as such, is increasingly motivating the behavior of some companies,”
it said.

With construction ofbuildings contributing to carbon emissions,
the real estate sector “is in the forefront of this shift, with much of the
focus on operational energy efficiency and sustainability development,” it
added.

The challenge though is in
convincing investors and developers that “adopting green practices” makes “good
commercial sense.”

“Specifically, developers who incur
the additional cost of developing green buildings need to be rewarded for doing
so,” CBRE said, noting that a “more basic” level of certification may raise
costs by 2-3 percent for new constructions, while a “greener” building ---
designed to achieve one of the higher standards --- is likely to add between 5
percent to 7.5 percent to construction cost.

Investors then will look for higher
yield from their investments which should come in the form of rent premium,
lower interest in the financial market, or lower premium for insurance
applications for a green building, since it is “increasingly seen as
‘future-proofed’ investments,” it added.

Study

In a recent study by CBRE Global
Network, it was revealed that while development of green spaces may entail
additional cost at the onset, the investment is “recoverable and is expected in
the long run through decreased operating costs, increased ROI through higher
tenant/customer retention and renewal, rental premium, and increased
building/asset value.”

“Developers are thus becoming much
keener meeting these demands and are seen to be more willing to incorporate
‘green’ features into their buildings, making them cheaper to occupy.

This is made possible by
technological advances, making it easier and cheaper to build sustainable
buildings,” it said.